Correlation Between Visa and Bnteau SA
Can any of the company-specific risk be diversified away by investing in both Visa and Bnteau SA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Visa and Bnteau SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Bnteau SA, you can compare the effects of market volatilities on Visa and Bnteau SA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Visa with a short position of Bnteau SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Bnteau SA.
Diversification Opportunities for Visa and Bnteau SA
Very good diversification
The 3 months correlation between Visa and Bnteau is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Bnteau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bnteau SA and Visa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Visa Class A are associated (or correlated) with Bnteau SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bnteau SA has no effect on the direction of Visa i.e., Visa and Bnteau SA go up and down completely randomly.
Pair Corralation between Visa and Bnteau SA
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.37 times more return on investment than Bnteau SA. However, Visa Class A is 2.69 times less risky than Bnteau SA. It trades about 0.17 of its potential returns per unit of risk. Bnteau SA is currently generating about -0.07 per unit of risk. If you would invest 27,379 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 3,803 from holding Visa Class A or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Visa Class A vs. Bnteau SA
Performance |
| Timeline |
| Visa Class A |
| Bnteau SA |
Visa and Bnteau SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Bnteau SA
The main advantage of trading using opposite Visa and Bnteau SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Bnteau SA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bnteau SA will offset losses from the drop in Bnteau SA's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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